As we prepare for World Trade Symposium 2019, taking place this year in New York City in November, it’s imperative to consider the existential threat to freer, open and rules-based trade that stems from short-sighted political exploitation. More importantly, what we can do to change the nature of the dialogue and to better tell the story of international trade.
There is no doubt that the recent rise of protectionism and economic nationalism is damaging global trade, and by extension, economic growth, development and inclusion. The current situation is being driven by a number of factors, including the fact that the benefits of international trade have not been distributed widely enough.
Many people and some nations have been excluded and marginalised as a result, leading to a rise in legitimate frustration, but also dangerous and destructive xenophobia that has been exploited by those whose narrow, generally self-serving agenda such emotions can serve.
We have not done enough to win the hearts and minds of people with positive messages and outcomes from global trade, allowing the displacements that result from other forces – like technology and automation – to be linked to trade flows.
We tend to talk about statistics and the mechanics of trade, such as the number of countries that make components in an aircraft or mobile phone, for example, instead of highlighting the millions of people who have been lifted out of poverty as the result of trade and linkages to global supply chains. We ignore the reality that trade works best when it serves the interests of trading partners rather than being approached as a win/lose proposition; that nations are less likely to shoot at each other when they trade, and that trade channels innovation, technology and best practices across borders.
Policy can make a difference to ensuring that global trade is fairer for everyone. Consider the push for so-called “progressive” trade agreements, or programs like the EU-funded “Hub & Spokes” that provide resources for EU trading partners to become better trade negotiators, to the benefit of all involved. Energetic defence of a rules-based international system, and institutions like the WTO, must be part of the effort to advance the global architecture for trade beyond this period of ideological posturing.
Technology plays an important part too. While you can’t apply technology to a broken trading network and expect it to work better, it does enable new trade routes to flourish, from African agri-businesses via mobile trading apps, for example, or for new digital payment systems to connect the unbanked to the global economic system.
Finding alternatives for the future
The current situation and the deplorable state of global discourse on trade, including the simple-minded, harmful use of tariffs as a form of economic bullying has already cost everyone, including the proponents of this approach, billions.
Perhaps the positive outcome will be that the story of trade will be brought more positively and sharply into focus, that we will all learn from this collective experience and get back to the more thoughtful understanding of international commerce as a critical and enriching part of the human experience.
At a minimum, current behaviours will drive a search for alternatives: alternative leadership, trading partnerships, political alliances, technologies and modes of trading. Over the longer-term, the development of these alternatives will serve us all for the better.
For now, that same search for alternatives will enable nations, political and business leaders and others to rise in defence of a better way, a more constructive, statesman-like approach to trade and international engagement. In doing so, we must ensure that the imperfections of the current model are fixed, and that inclusion becomes top-of-mind.
The World Trade Symposium brings key elements – trade, policy, finance, technology and inclusion – together in a way that is unique, and provides an ideal platform to explore and advance these issues at a time where principled leadership and thoughtful action are badly needed.
This article previously appeared in Trade Finance Magazine here.